Tech & Sourcing @ Morgan Lewis

Earlier this month, we discussed the significance of the transformation workstream in outsourcing transactions and outlined important topics and points to consider when documenting the overall transformation methodology exhibit.

Transition services agreements (TSAs) are often an integral part of a transaction when a buyer or a seller needs to use the other’s services, infrastructure, or resources for an agreed-upon period of time after an acquisition.

In April, we shared a LawFlash Outsourcing and Managed Services Agreements During COVID-19: Our Perspective. With the continued and unprecedented impact of the coronavirus (COVID-19) pandemic on business operations, we thought it would be timely to provide a brief update on five top-of-mind issues that we are addressing with outsourcing and managed services clients.

Transformation is often a critical component of outsourcing and managed services transactions. The transition of core or non-core functions to a third-party provider can provide an opportunity for the customer to leverage the service provider’s expertise and experience to transform its underlying systems to more modernized and flexible technology.

The Financial Stability Board (FSB) published on December 9, 2019, its report on financial institutions’ increasing reliance on third parties to provide cloud computing services (the Report).

In cloud services, whether it is infrastructure as a service (IaaS), platform as a service (PaaS), or software as a service (SaaS), service availability is often a significant customer concern because the customer is relying on the vendor to provide and manage the infrastructure and related components that are necessary to provide the services.

In a long-term outsourcing, software as a service (SaaS), or other services agreement, the customer will typically push for a termination right relating to the service provider’s breach, and perhaps for an insolvency event or change in control of the service provider.

Morgan Lewis has recently issued several LawFlashes on the 2019 Novel Coronavirus (COVID-19) outbreak, providing a number of resources for businesses across the globe dealing with various compliance challenges and unanswered questions.

Are you about to sign a service agreement with a third-party service provider under which it will access and use technology of your company? Have you checked your applicable third-party contracts to see if you need any consents?

The UK government has indicated that the UK’s approach to public procurement will fundamentally change post-Brexit. While it remains to be seen whether such a fundamental change will be possible in practice, the UK government’s pronouncements clearly suggest that change is on the way, which will most likely provide a less prescriptive framework for UK contracting authorities to follow.